An adviser formerly associated with LPL Financial claims the firm stole his business from his hands, bringing his assets under management from about $450 million to zero overnight.
Mark Lamkin filed a lawsuit in Kentucky state court that collided in federal court this week, naming his firm, Lamkin Wealth Management, as a plaintiff against the independent mass broker/dealer.
“Simply put, LPL orchestrated, assisted and executed a classic corporate raid against LWM, its subsidiary, through the actions of three LWM employees who at the time were also affiliated with LPL,” the complaint said.
LWM provided financial services including wealth, asset and risk management planning to clients and was affiliated with LPL beginning in February 2001. This arrangement meant that LPL was “initially familiar with virtually every aspect of LWM's business,” according to to Lamkin's lawsuit.
In 2008, LWM hired Jonathan Upton as a financial advisor and brought Gregory Smith into the same role in 2012. The firm added Bruce Lindsay and his book of business in 2015. All three employees allegedly signed non-competes, non-solicitations and trade secret agreements.
But starting in 2017, Lamkin began to get cold feet about LPL, especially after IBD addressed compliance issues with LWM counsel Don Woods. FINRA eventually fined Woods $10,000 and suspended him for six months for inflating the net worth of clients on applications for real estate investment trusts.
Lamkin said the ordeal created so much bad blood between him and LPL that he began looking for a new broker/trading partner in late 2017.
But Lamkin alleged that LPL began working with Lindsay, Smith and Upton behind their backs, “creating an atmosphere of fear and intimidation at LWM causing Lindsay, Smith and Upton to fear that their livelihoods were in danger” if they did not leave LWM and steal its customers, according to the complaint.
The complaint also alleges that Lindsay, Upton and Smith “falsely assured” him that they would remain on board until LWM switched brokers/dealers, all the while accessing and downloading customer information with LPL's direction and support.
In August 2018, LPL severed its relationship with Lamkin, although the three advisers claimed they would remain with LWM until Lamkin found a new b/d branch. But, Lamkin argued, LPL approached the trio, telling them “they needed to get out of LWM, that they needed (and were very encouraged) to get customer files from LWM, and that they needed to break away from LWM” as soon as possible. . as much as possible, according to the lawsuit.
On December 5, 2018, the three advisors and their clients left LPL, allegedly without prior notice. According to the complaint, the move reduced LWM's total assets under management from more than $451 million to zero overnight. According to Upton's LinkedIn profile, the trio started their LPL-related firm, Centris Wealth Managementbefore registering with FINRA as working for LPL-affiliated Keystone Financial Group (the three advisors work out of Keystone's Louisville office, according to that firm's website).
Lamkin also accused LPL of trying to smear him with internal investigations, including one focused on a $1.26 million loan from a customer.
The case eventually ended up with FINRA, which found that Lamkin had obtained the loan without notifying LPL in violation of FINRA rules. Lamkin agreed to a $7,500 fine and 90-day suspension. Lamkin has been associated with Calton & Associates since 2018, according to his BrokerCheck profile.
Lamkin is seeking $10 million in damages in the lawsuit, arguing that he would have sold his firm's book of business in 2018 without assurances from Lindsay, Smith and Upton that they would remain on board during any transition.
Neither LPL nor lawyers for Lamkin Wealth Management returned requests for comment prior to publication.